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TMI Blog2003 (12) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... the calculation on which he has determined the profit margin. I however do not find that this by itself is sufficient to hold as incorrect the fine determined by the Commissioner. It is not contended that the fine determined is contrary to the provisions of Section 125(2). In that situation, I do not find any requirement of law for the adjudicating authority to furnish a precise basis for the fine that he has determined. The exercise of discretion in the matter of determination of fine is not ex facie arbitrary, capricious or mala fide. It would have been easy enough for the appellant to demonstrate the incorrectness of the Commissioner's conclusion by furnishing figures. This has not been attempted. It is a settled law that fine and penalty are to be determined upon the facts of each case. The judgments of the Supreme Court cited by the Departmental Representative make this clear. The Court has also not found incorrect the action of the Tribunal in determining the fine based on facts available to it. The Tribunal's decision in Jai Bhagwati Impex Pvt. Ltd.[ 2001 (11) TMI 579 - CEGAT, MUMBAI] , fixing a fine of 50% which has not been interfered with by the Supreme Court [ 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and penalty are excessive and they seek reduction in fine and penalty to the extent of 20% and 5% of the value determined, in the light of earlier decisions of the Tribunal in the case of Marmo Classic v. CC, Nhava Sheva [2002 (148) E.L.T. 1019 (T)] (Order Nos. C-I/1008-09/WZB/2002, dated 16-4-2002), Jai Bhagwati Impex Pvt. Ltd. v. CC C.E., Goa [2002 (145) E.L.T. 158 (T) = 2002 (48) RLT 199], Mahalaxmi Tile Marble Co. Pvt. Ltd. v. CC, Ahmedabad (Order No. C-I/3603/WZB/2001, dated 12-11-2001) and Akash Stone Industries Others v. CC, Mumbai/Nhava Sheva/Goa [2002 (150) E.L.T. 667 (T)] (Order Nos. C-I/1375-1407/WZB/2002, dated 17-5-2002). We find that the Commissioner has taken the margin of profit considering the market price of subject blocks of Rs. 27,000/-, as 52% of the CIF value based on the formula, MOP - declared CIF value + duty payable on enhanced CIF/declared CIF value. 3. All aspects of the matter have been considered in the case of Akash Stone Industries, cited supra, where the Tribunal noted its' earlier decision held that 20% of the CIF value ascertained would be the appropriate redemption in case of import of marble blocks and 5% of the CIF value ascertained would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded by the Hon'ble Member (J) in Paragraph 2 above, the appellants are merely seeking reduction in redemption fine and penalty to the level of 20% and 5% of the value determined. It has also been recorded therein that the Adjudicating Commissioner has enhanced the declared value from US $ 298.83 PMT CIF to US $ 303 PMT CIF and has determined the margin of profit to be 52% of the CIF value. (ii) The Hon'ble Member (J) has proposed in her order to reduce the fine from Rs. 17,50,000 to Rs. 3,50,000/- and penalty from Rs. 3,50,000/- to Rs. 17,500/- which comes to about 9.5% and 0.5% of the determined value of Rs. 36,11,980/- (The declared value is Rs. 35,62,269/-). Such reduction will leave a huge margin of profit at the hands of the appellants and encourage contravention of import restrictions on the impugned goods and make smuggling of the same a profitable business. It will also encourage others as they will be assured that breaking the law would entail extra payment of only about 10% by way of fine and penalty leaving a large profit margin. (iii) The question involved here is not whether the Tribunal can reduce fine and penalty in a particular case. It certainly can, after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be within a norm of 25% and that the same should be binding on the Revenue. With great respect to the Hon'ble Member (T) who has recorded the order in the case of Akash Stone Industries (supra), I must point out that he has overlooked a very specific and relevant guideline contained in the said Central Appraising Manual, Volume V, Chapter 3, Para 4(bb), which reads as follows :- The fine has to be equal to the norm or the margin of profit whichever is higher. It is, therefore, clear from the above that levy of fine within the norm of 25% is not actually set out in the Central Appraising Manual. It is also clear that by ignoring to consider a vital provision in the Central Appraising Manual as contained in the said Para 4(bb) and holding that the Revenue is bound by the norm, the Tribunal's decision in Akash Stone Industries (supra) has been rendered per incuriam and the same cannot, therefore, be considered to be a binding precedent, (v) It is also seen that in Akash Stone Industries (supra) it has been indicated that in the sample appeal considered by the Bench, the Commissioner has worked out the margin of profit to be 33% only. In the instant case, the margin of prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed by the Hon'ble Member (J) as it works out to less than 0.5% of the value determined and would hardly be a deterrent either to the appellants or to any one else in preventing them from breaking the law again. 7. For the reasons stated above, I am of the view that the quantum of fine and penalty imposed by the Adjudicating Commissioner does not require any interference. The appeal is rejected as devoid of any merit. Sd/- (C. Satapathy) Member (T) Dated : 7-11-2003 DIFFERENCE OF OPINION 8. The following difference of opinion is placed before the Hon'ble President for reference to Third Member : Whether the fine and penalty are required to be reduced to 20% and 5% respectively of the CIF value determined for the marble imported by the appellants and the appeal partly allowed, as proposed by Member (Judicial). OR Whether the fine and penalty as imposed by the Adjudicating Commissioner are required to be retained and the appeal rejected, as proposed by Member (Technical). Sd/- (C. Satapathy) Member (T) Dated : 12-11-2003 Sd/- (Jyoti Balasundaram) Member (J) Dated : 12-11-2003 Order Gowri Shankar, Member (T) 1. The question that has been referred to me is whether the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .50 lakhs. The fine at 20% of this value therefore would correctly be around Rs. 7.3 lakhs and the penalty at 5%, Rs. 1.8 lakh. The Member (Technical), he says, has not considered these amounts, but has gone by the erroneous amounts shown in the order of the Member (Judicial) on merits, he contends that the earlier orders of the Tribunal determining fine and penalty at these levels have been upheld by the High Court on more than one occasion. The High Court had accepted the Writ Petition No. 4124 of 2002 filed by Marmo Classic and directed the Commissioner to sanction refund by implementing Tribunal's order reducing the fine and penalty to these levels. In large number of cases earlier, the Tribunal has found the fine and penalty at 20% and 5% respectively to be sufficient. The Commissioner had not shown that in the present case the profit margin was higher than that in the past cases. His order determining the market price of marble slabs manufactured out of rough marble is not based on actual figures gathered from the market. The margin of profit that is derived is thus not based on facts and rests on conjecture. There is therefore no reason to take a different view in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s marble would be basic articles. He also points to instructions in the Manual that the fine has to be equal to these norms or the margin of profit whichever is higher. 6. Section 125(2) of the Act provides that the fine for redemption of goods ordered to be confiscated cannot exceed the market price of the goods and excise duty payable thereupon. Therefore, any fine that is not in excess of this limit cannot be said to be contrary to law. Similarly, the penalty on the importer will not be illegal if it is within the limits specified by Section 112 of the Act. The margin of profit, which is a contentious issue in this appeal, is only a working rule that the department accepts. The reason for basing fine upon margin of profit is that no importer should benefit from his illegal act of importation by making a profit on the importation. 7. I agree that the Commissioner's order does not disclose the calculation on which he has determined the profit margin. I however do not find that this by itself is sufficient to hold as incorrect the fine determined by the Commissioner. It is not contended that the fine determined is contrary to the provisions of Section 125(2). In that situation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the past have thus failed to give effect to the provisions of law prohibiting import of the goods without a licence. It is possible that, as a result of the fines that were earlier fixed, the market price has increased, leading to a continuation of import. If that is what has happened, it is clear that that the market situation has changed, resulting in the earlier levels of fine being lower than the current margin of profit. In that case, too, a higher fine would be called for to cater to the changed situation. The present appellant has himself earlier imported goods six times earlier in 2001-2002 and was permitted to clear them presumably on the basis of penalty lower than that imposed now. It is thus clear that the fine imposed earlier has not acted as deterrent to further imports by nullifying any gain made from illegal imports. The same consideration, the fact that the previous lavels of penalty have failed to deter the appellant from continuing to import goods despite being conscious that the import was contrary to law justifies a higher penalty. 11. I also do not find it possible to agree with the contention of the Counsel for the appellant that the difference in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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